Remarkable Mortgage
Colorado's Home For Reverse Mortgage Loans
A peek behind the HECM (Reverse Mortgage) curtain
In order to make an informed decision, about a Reverse Mortgage, you need information based on solid numbers, sound reasoning, and real-life stories.
So let’s take a peek behind the curtain at some things you need to know about a Reverse Mortgage.
I’ll show you what most people don’t know and details most lenders won’t ever tell you. I tell my borrowers those things because they both deserve and need to know.
You also have the right to know. I like to pull back the curtain because I believe in the value and benefits of a Reverse Mortgage for the right reason and for the right person.
Scroll Down For Posts On:
-The “Free & Clear” Reverse Mortgage
-The true cost of a Reverse Mortgage.
-My Favorite Reverse Mortgage Purchase of 2021
Thanks for reading, Mark Allen Schmidt
Owner and broker, Remarkable Mortgage
The “Free & Clear” Reverse Mortgage
I’ve been originating Reverse Mortgages for around 10 years. Up until about five months ago I hadn’t done a Reverse loan on a “Free & Clear” property. Since then I’ve done two, and I have three in the pipeline.
The first two were couples who were referred to me by their financial planners. One couple is using the money to help their kids buy homes. The other couple is buying a second home close to their kids in another state.
On two of the current loans it was the adult children who found me and interviewed me before I ever met their parents. In both cases the adult children attended the required HECM counseling with their parents.
One added note: All of my “Free & Clear” borrowers were pleasantly surprised by one lessor-know feature of a Reverse loan: The 150% of appraised value, first position HUD lien on their property.
They don’t owe 150% of the value of their home, but anyone who might want to meddle with their title will find a big, fat, first position lien.
Thanks for reading.
Mark Allen Schmidt 720-206-4539
Owner & Broker Remarkable Mortgage
NMLS 84604 CO Lic 100037582
A Look At The Cost Of A Reverse Mortgage
The Scenario:
Behind The Reverse Mortgage “Cost-Curtain.” The Price Is What You Pay.
The “Comparison” above is from a Reverse Mortgage I closed in December of 2021. The loan is an adjustable “Cap 5.” (Line Of Credit loan)*
*the next post show why the borrowers did a Reverse Mortgage
Rates And Fees
–1.875%: The Margin. The lenders charge for the money you borrow.
–2.125%: The initial interest rate. The margin + the index (0.25) = The index adjusts every month.
–0.50%: The annual FHA insurance charge on the loan balance.
–7.125%: The lifetime cap: Limited to 5% above the initial rate.
Calculation
–$665,000: The home value, the same as the “Max Claim.”
–$359,100: The Principal limit. The total amount of money available in this loan.
–$13,300: The Initial Mortgage Insurance (IMIP). The biggest cost of a Reverse Mortgage. 2% of the home value.
–$0.00: Origination fee. I didn’t charge an origination fee.
–$2,176.20: The total loan costs. (title, recording etc.)
–$343,623.80: Cash available after costs.
My Borrowers Pay Less.
Why? I charge less. The margin and the origination fee are negotiable. The 2% initial mortgage insurance premium and the loan costs are not.
Your broker can help pay those fees. Ask them, “What will you contribute to my deal?”
On this deal I contributed $6,490. Appraisal cost: $490.+ $6,000 waived origination cost. First know the price, then learn the value of a Reverse Mortgage.
Next post: “The Value Is What You Get.”
"Price is what you pay, the value is what you get."
Warren Buffett
Continued from “A look at the cost of a Reverse Mortgage.”
“The Value Is What You Get” Warren Buffett
My borrowers owned their home, free and clear. They decided to take out a Reverse Mortgage so they could help two of their children buy homes. The idea to use home equity came from their financial planner.
When the deal was done, and the dust all settled they had $190,000 to help their children buy homes. One of the great gifts we parents can give to our children is something that will help them get ahead in life.
That is what my borrowers did for their children with money draw from the equity in their home using a Reverse Mortgage.
Recap Of The Costs And Benefits:
-Total Mandatory Obligations (ie, cost) $15,476.20
-Cash Request (money they took at closing) $190,000
-The Benefit ($190,000 down payment money for their children) Immediate and lasting.
Thanks for reading, Mark Allen Schmidt
Owner & Broker Remarkable Mortgage
720-206-4539
NMLS 846014 CO 100037582
mark@remarkablemortgage.com
My Favorite Reverse Mortgage Purchase Of 2021
My Favorite Purchase Of 2021
The Scenario:
“They wanted to live in Heritage Eagle Bend.”
I’ve know “Don & Lynn” for many years. They both recently retired and their dream was to live at Heritage Eagle Bend in Aurora, CO.
They had heard about using a Reverse Mortgage to purchase a home, so they called me. We talked for a few hours and when the lights went on in their eyes they said, “let’s do this!”
Fast forward to a tragic event that became a blessing to everyone involved.
A man Don, Lynn and I had known and loved passed away. At the memorial service, the man’s family saw Don and Lynn and said, “Our father always wanted you have his home.”
At first they were shocked, then the the pieces started to come together. Shortly after that, they wrote an offer, and we started the Reverse Mortgage purchase process.
The bottom line: Less than two months later, we closed on the their new home in HEB, and they couldn’t be happier.
This is what the deal looked like. Don and Lynn sold their previous home, the money from that sale was the “down-payment” for their Reverse (HECM) for purchase.
They brought a 48% down payment, the rest of the purchase money, 52% was provided by their new Reverse Mortgage.
They are not required to make a monthly payment, they do have to pay their property taxes, HOA fees and homeowners insurance. They plan on living there for a very, long time.
Thanks for reading.
Owner and Broker, Remarkable Mortgage
My Favorite Purchase Of 2020
The Scenario:
“They were cash rich and house poor”
I was introduced to a realtor named Michael* who works with Orchard.com, a company that will give you a guaranteed purchase price on your existing home as you look for a new home. Michael introduced me to “Sam and Sally,” a couple who had about $600,000 in cash and equity but the home they wanted was $845,000. And since they were both retired, they could no longer qualify for a traditional purchase mortgage. Their options for buying their dream home were rather bleak.
Then we started talking about buying their last home with a Reverse Mortgage Purchase Loan.
This is a recent review from a client and new friend.
“Remarkable is right. I had a very good experience and I would recommend Remarkable Mortgage to anyone in need of a Reverse Mortgage. Mark is professional, friendly and the best value I found. Thanks again Mark!!!”
My Response:
“Hi Barbara. It was a joy working with you. It is also nice that you found me on ‘Google my business‘ site. I wish you all the best. Mark”
Colorado Reverse Mortgage Conversations.
“All The Benefits, and None Of The Risks,” of owning a home. I had a conference call with a lady and her two sons. We talked for more than an hour about a Reverse Mortgage for their mom. When they rang off, I called her back and this is what she asked me…
Colorado Reverse Mortgage Conversations.
A gentleman came to my home to replace a door. We got to talking and before he was finished I asked his this question, “Would you be able to retire if you could retire your current mortgage?”
He said, “Yes I would. And my wife as well.
He’s going to talk with his wife then get back to me.
Browsing Borrowers
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